As Mexican international and labor lawyers we have to deal (put up with) on a daily basis with annoying and frustrating issues and situations that originate as a result of the interpretation and application of the Mexican Federal Labor Law (the Law or this Law).

People residing in the most advanced democracies tend to agree that their legally elected officials to the house of representatives or the senate, or parliaments in its case, are bona fide, smart, full of principles, moral, ethical and most importantly, that they have, in their hearts, souls and minds, the best interests of those they represent when proposing and/or voting for a determined bill that might eventually become law.

When laws are passed and enacted they come to serve a particular purpose: regulate certain behaviors, recognize some rights, impose obligations and restrictions, penalize those that fail to comply, establish mechanisms, programs, provide assistance, support, guidance and etcetera.

Most laws are passed taking into consideration the status quo, the time in history, the special needs at the moment, the circumstances and even to correct situations that over time have deteriorated or have been misinterpreted, misconstrued or even neglected.

The Mexican Federal labor Law was enacted back in 1970, that is forty years ago. The idea, in general terms, was good. The time was almost right. The goal was, in most instances, reasonable.

However, the drafting was poor, the pressure by unions and interested groups was substantial, fairness was neglected and the balance that was sought and most thought was going to be generated with its enactment was not accomplished.

To the contrary, although some good came out, the Law went too far to the left and created profound divisions between employers and employees, provided unions with almighty authority and unlimited tools to get employers on their knees and countless restrictions for employers to be able, to hire, train, test and fire employees, in the latter case even when an employee was no longer needed or had poor performance.

Popular wisdom in Mexico holds than “no wrong may last for more than 100 years” but, as we have witnessed and can tell, wrong can survive for at least 40.

I woke up this morning feeling somehow optimistic and thinking (hoping, longing) that even in Mexico, where political forces and parties are taking more than ever a partisan approach to issues they have to decide upon, the “best national interest” will be a priority in the legislative agenda and that the bill that was recently introduced by the National Action Party (PAN, by its initials in Spanish) will be voted upon substantially in the shape, form, scope and language it was introduced.

Herein below please find the highlights of the contemplated reform:

• Trial period: from 1 to 6 months
• Training period: from 3 to 6 months
• Hourly shifts allowed and paid according to hours worked and not per day
• Promotion based on productivity and not seniority
• Limit back salaries to 6 months and no longer indefinite. A 2% interest rate applies after 6 months on unliquidated amounts (if the employee/plaintiff prevails)
• No mandatory re-instatement for employees with less than 3 years on the job
• Employer no longer allowed to request female employees for proof of no pregnancy to be hired or to remain on the job
• Tele-work: working from home or other places using electronic means to be allowed
• Sanctions for sexual harassment
• Typifies hiring of those under 14 years of age as a crime
• Allowing as evidence in labor trials the use of technological equipment and data
• Obligates unions to disclose financial data to their members
• Eliminates the obligation on the employer to deduct union dues from the payroll.

Taking into consideration that the proposed reform was kind of shy since it stops rather short of addressing modifications that urgently needed to be made, Mexicans should not settle for less. And let us start by considering this one as a first step of a long, uphill walk. Well, I forgot I guess as a result of my declared optimism, assuming the proposed reform this time is approved and is not defeated as previous attempts have been.

Mexico just cannot afford not to have this reform approved this time around. The Law as it now stands has become a real burden. It has to be adapted and updated to adjust to modern times.

The Asian tigers are already eating the lunch and dessert of the Mexicans. And they are still hungry. The only problem is that the cake is not big enough.

By: Ernesto Velarde Danache, Ernesto Velarde Danache, Inc. – Mexican & International Lawyers - www.velardedanache.com